Tag Archives: settlement

Groupon Settles Coupon Expiration Date Suit for $8.5 Million

Discount!

Groupon, the world’s largest purveyor of coupons, found itself in a bit of trouble recently regarding their products’ expiration dates.  A lawsuit brought by Eli R. Johnson alleged illegal expiration date policies on Groupon’s coupons, putting the company’s very lifeblood in jeopardy.  Johnson bought a coupon that expired after a few months.  He brought suit after learning that Illinois law requires a minimum expiration date of five years for all gift certificates, including coupons.  Apparently, the online giant, which operates across the entire country and Europe, didn’t bother to learn the nuances of consumer protection laws from state to state, leaving them vulnerable to lawsuits.  Not even in Illinois, which is the jurisdiction of this lawsuit and, embarrassingly, Groupon’s own base of operations.  Today’s legal settlement allows customers in certain states to redeem some coupons past their expiration date or, failing that, receive a full refund.  Groupon has $8.5 million in a fund set aside for the latter option.

It’s tough to imagine that a company that deals in, say, cold medicine wouldn’t know about the laws affecting cold medicine across all of the states that it does business in.  So too is it hard to believe that a company solely devoted to coupons wouldn’t know about coupon regulations.  However, this is the same company that has been in the news for having trouble with their refund policy on their SEC filings.  Add that to the current class action lawsuit about employee overtime pay and Groupon appears to be in some hot water as of late.  The Wall Street Cheat Sheet has even described their current financial standing as an “implosion”.  Harsh.

 

Astor Estate Finally Settled

Estate settlement

The estate of socialite Brooke Astor has finally been settled, AP News reports.  Her will has been hotly disputed since 2007, when she died at age 105.  In 2009, her son, Anthony Marshall, was convicted of manipulating Astor’s fragile dementia to make changes to the will in his favor.  In the final settlement, Marshall will receive $14.5 million, nearly half of his fraudulent earnings.  Much of that will have to be paid back, on account of his conviction and being a general scumbag.  $100 million will go to charities, as were Astor’s original wishes.  Astor was a generous philanthropist since the death of her husband, real estate magnate Vincent Astor, donating millions to the poor and to artistic pursuits.  True to form, among the charities to benefit from today’s settlement is the Metropolitan Museum of Art, which will receive about $20 million.  All that money has been held up for nearly five years when it could have been doing something productive, which means that, overall, this is some very good news for charity.

 

Former Bear Sterns Employees Share $10 Million Settlement

The effect of business

Employees of Bear Sterns, the financial giant that was among the first failures of the subprime mortgage crisis in 2008, claimed in a lawsuit that the bank mishandled its investments (duh), causing them to lose money in an employee stock ownership plan that was part of a retirement package.  Today, the Southern District Court of New York approved a $10 million settlement to be shared among thousands of employees.  The number may seem big, but it’s really more of a drop in a dingy bucket, accounting for between 10-28% of their total losses in the stock.  According to Reuters, more than 8,400 employees lost about $215 million in the collapse.  The settlement means that the former Bear Stearns (now owned by JPMorgan, who shilled out the settlement money) will never have to answer as to whether they knew their investment plan was unsustainable and risky.  If it went to court, in light of the recent $25 billion federal mortgage settlement, I’d like to think they’d have little to say in response.

For some laughs, here’s Mad Money’s Jim Cramer promising that Bear Stearns was not in trouble mere days before its complete failure and sale.

Mets Pay $162 Million in Madoff Settlement

NY Mets

Mets fans are used to errors on the field, but not in the bank.  Fred Wilpon and Saul Katz, the owners of the New York Mets, have settled a lawsuit concerning their profits from the much-publicized Bernie Madoff Ponzi scheme, the biggest investment fraud ever conducted.  Irving Picard, the trustee hoping to recoup the investments lost in the Madoff case, had sued the Mets owners accusing them of “willful blindness”, or that they were aware of Madoff’s fraud, but ignored it because they were making money.  Early adopters of Ponzi schemes often make money in the time it takes to collapse.  The settlement today makes sure that those claims of willful blindness never go to court, claims which Picard thinks a jury would have found true.  Jury selection for this trial was set to occur this morning.  Luckily for the Mets, the owners settled for $162 million, nearly half of the $386 million they could have had to pay out.  This is in addition to the $83.3 million in profits the judge in this case had already ordered to be paid back.

It will be interesting to watch how the rest of the Madoff damages litigation pans out.  Despite the 74-year-old head honcho already convicted and in jail for a 150-year term, the recovery effort is still going strong, with Picard getting about $11 billion of the lost $17.3 billion returned.  It is a little late in the game now, but who knows.  Maybe all those rich people who trusted their money with a flimsy criminal will get their money back.  Also, maybe pigs will fly.  Here’s hoping!

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Celebrity Chef Pays $5.25 Million in Confiscated Tips to Workers

A pile of delicious spaghetti (representative of but not actually Batali’s, though)

Celebrity chef Mario Batali has settled with his disgruntled workers over allegations he skimmed 4-5% of servers’ tips at the end of every night at his high-profile restaurants.  The employees claimed that they were not paid overtime when they worked for over 10 hours and that Batali took the tip money to pay the salaries of sommeliers at his other New York restaurants.  The settlement comes in the wake of an overhaul of New York wage laws, which one lawyer connected with the case said made the circumstances “ambiguous”.  Overall, tip-skimming is illegal, and restaurant owners need only follow the guidelines set by the New York legislature to avoid similar lawsuits.

I went to one of these restaurants a few years ago as part of a company morale type of thing at my old job.  The food was pretty good, but not exactly worth the money paid for it.  I guess it’s more about the name at the front of the restaurant than the meal itself.  But anyway, between 20 or so people, the bill turned out to be more than $1,000 with wine and whatnot, if I recall correctly, and probably more knowing my old boss.  A 20% tip on that would be $200, and 5% of that would be $10 going to Batali’s sommeliers.  It seems like a pittance to file a lawsuit over when you look at it localized like this, but compounded over however many hundreds of meals are served per day over five years and between at least eight restaurants, this number becomes astounding.  If the tip-skimming was truly as widespread as the plaintiffs alleged, Batali should be thankful that he only had to pay $5.25 million.

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